Head of PACL Arrested Over Alleged Rs 45,000 Crore Investment Scam

New Delhi: Central Bureau of Investigation (CBI) on Friday arrested the founder of PACL Ltd over allegations the property company cheated investors of $6.8 billion (about Rs 45,000 crore), in what local media is calling the country's biggest financial scandal.

The arrest of Nirmal Singh Bhangoo comes 17 months after market regulator Sebi (Securities and Exchange Board of India) ordered PACL to return money to millions of investors, saying the company was running an illegal investment scheme.

The scheme promised depositors returns on investments in agricultural land, the regulator said.

PACL has argued it was selling land to customers and not investment schemes, and so was not subject to Sebi regulations.

Reuters did not get any response to phone calls to PACL's head office in New Delhi on Friday.

PACL founder Mr Bhangoo and three other company officials were arrested on Friday as part of the ongoing investigation into allegations of criminal conspiracy and cheating, said R K Gaur, a spokesman for the Central Bureau of Investigation.

The case involves alleged collection of about Rs 45,000 crore ($6.8 billion) from roughly 55 million investors across the country, Mr Gaur said, terming it a "Ponzi scheme case".

Regulators have stepped up scrutiny of unregistered investment products over the past two years, plugging regulatory loopholes that had long allowed unregulated entities to raise billions of dollars from small investors. Many people ended up losing their life savings in these schemes.

Subrata Roy, founder of conglomerate Sahara India, has spent the last 21 months in jail for not complying with a court order to return $5.4 billion (around Rs 36,000 crore) to investors who put money in a 2008-11 time deposit plan that was later ruled illegal.

Sahara's business empire includes overseas hotels such as the New York Plaza and a Formula 1 racing team.

Latest Realty News

Chandigarh: Senior Congress leader Sunil Jakhar on Thursday led a group of people from different areas of Punjab to the director general of police, alleging that they had been duped by an Abohar-based builder in a real estate project and that no action had been taken even after 16-odd cases were registered. Following the representation, DGP Suresh Arora asked the inspector general of police (crime) Nageswara Rao to look into the matter.

Mumbai: Developers in certain micro markets of metros like Delhi-NCR, Mumbai and Bengaluru witnessed a drop of 4-20 per cent in launch prices of residential projects in 2015 over the previous two years, according to a report by property consultant Cushman & Wakefield.

Dubai's Emaar Properties has hired a local contractor to restore a fire-damaged hotel, stating on Sunday that the New Year blaze would have "no material impact" on the company because the building and risk of fire are covered by its insurance.

Bhubaneswar: Here is a good news for real estate developers, factory owners, civic bodies and energy department as they can get online height clearance from airport authorities for construction of buildings.

Rjkot: An 18-year-old woman, Neha Pitroda, a resident of Tulip apartment, consumed poisonous substance on Friday evening near Eagle Petrol pump and alleged that she was being harassed by a city-based real estate developer Kamlesh Ramani. She also left a note which mentions Ramani's name.

MUMBAI/NEW DELHI: Real estate companies are expected to raise more money from private equity funds in 2016 than last year after the government simplified foreign direct investment norms for the sector last year.

NEW DELHI: In the New Year, India's somnolent real estate market may finally get a much needed boost — builders may have to comply with only 12 to 24 environmental norms, depending on project size, instead of the 100 green rules that were originally proposed.

RAJKOT: A city-based real estate broker has lodged a complaint against unidentified person after allegedly receiving an extortion call on Tuesday night. The caller had demanded Rs 1 crore from and threatened to kidnap his daughter if he failed to deliver amount till Wednesday evening.